Oil rises for second straight day as US oversupply fears recede

Oil prices rose on Thursday, to head for the second straight daily gain, near touching the 5-month hit that was hit last week, after US oversupply fears receded following a decline in the US crude inventories for the third week, in addition to a slowdown in shale oil production.

US crude rose 0.75% to $42.84 a barrel, after opening at $42.52, and hit a session-low of $42.40, while Brent rose 0.6% to $45.56, after opening at $45.30, with a low of $45.18. 

US crude gained 2.1% yesterday, and Brent rose 1.8%, and posted their second daily gain in 3 days, after the US Energy Information Administration's weekly report.

US crude jumped to 5-month high of $43.50 during the past week, and Brent crude hit the highest since March at $46.22, after US oversupply fears receded.

The US Energy Administration reported yesterday a drop in commercial inventories by 4.5 million barrels in the week ending August 7, passing estimates of -3.4 million.

Total stocks inventories to 514 million barrels, the lowest since April 10 in a positive sign for the US demand. 

US output fell 300 thousand bpd last week to a total of 10.7 million bpd, the lowest level since June 12, while remaining the world's top producer.